Advertising a Private Label Product With Amazon PPC Campaigns

 

Amazon PPC is a nice chance to increase online sales. It can work much better than other ways of growing your organic rankings as well. So, growing sales and rankings at one time - sounds great, doesn't it?

Moreover, the PPC program is quite simple, so I doubt that there will be any problems in learning how to work with it.

In this article, I want to tell you how to squeeze the maximal result from the Amazon PPC platform. You'll learn how to optimize your campaigns in order to boost your sales dramatically. I'll show you the examples from my Amazon FBA practices.

 

How does the paid search work?

Starting the journey to understanding the details of how Amazon paid search works, let's begin with its concept and goals. Amazon work with millions of different searches monthly. The majority of them are long-tail ones that consist of 3 words and more. The main advantage is that customers are already ready for making a purchase.

People rarely go to Amazon just to look at items or to gather new ideas. They are aware of what they need, visit the Amazon website and search for the product they want to buy. You can see organic results mixed with paid ones.

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The strategy of Amazon PPC (pay per click) campaigns

Of course, creating ads on Amazon is easy and intuitive, as I mentioned above, but it's always better to know the milestones and strategy before advertising. It will help you to make your decisions more logical and correct.

Here is an outline for running Amazon PPC campaigns:

  • Find the best keywords that bring more sales with running Amazon PPC.
  • Remove keywords and targeting that don't convert sales.
  • Increase bids for words that work well.

But before we proceed to all these things, let's learn the main Amazon metrics. Here are they:

Advertising cost of sales means the % of attributed sales that were spent on ads. It can be calculated by dividing  the whole ad spend by such sales. For instance, if you've spent $5 on PPC, and you attributed sales is $25, your ACos will be 20%.

Attributed sales is the number of sales you got by click on the ads. This data is collected within 48 hours, that's why you may not see it in the 'Today' range, but it can appear in the 'Yesterday' range. You may also view individual sales for products in the report called 'Campaign performance'.

Impressions is the quantity of times of displaying your ads. It usually takes 3 days for removing invalid clicks from the reports. So, data for the last 3 days can be adjusted during this period.

Clicks it a quite clear metrics. It means the number of clicks. It is adjusted the same way as Impressions, during 3 days.

Two thoughts I have during writing this Amazon PPC guide:

  • I hope that you've already optimized your listing. If you are not sure if you have done everything for attracting a potential customer, ensure you have the following things: high-resolution pictures, a descriptive product title, well-written bullet points, and a full informative product description.
  • In this article, I'm going to focus on getting traffic to an Amazon product page, for example, Amazon sponsored products. So, we won't talk about Product ads that drives paid traffic to your site outside Amazon. A website is not necessary for successful work with Amazon FBA, so let's assume you don't have it.

 

How your first PPC campaign should be created?

The process is simple as you don't have to set many settings for your campaign. The first point is setting a name for your campaign.

Try to make it descriptive and informative for scaling it further. It will help you in creating new ads and ad groups. That is what you can edit while creating a PPC campaign in the 'Campaign manager':

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Let's pretend we started with 50-75 dollars per day. This figure is just a max limit, but not the total amount of money you'll spend on your PPC campaigns. As for me, I rarely reach that marks. But doing this will refine afterwards, I am sure.

As you see on my screenshot above, Amazon offers its automatic bid-adjustment feature. I'm not very experienced in using it, but it would be interesting to know whether some of you have worked with this feature. I can say that Facebook and Google get better conversions for less prices with this algorithm, so we'll hope that it works the same way on Amazon.

How much money should you spend on PPC campaigns?

I can say that the final sum depends on many things... Your margin for ads, you opportunities for investing in the long term run, the effectiveness of your campaign, and so on. However, if you notice that your PPC works well and your sales grow, continuing running paid ads makes sense.

One of metrics that are helpful in clarifying that fact is ACoS. I wrote its definition above. Calculating your perfect Advertising cost of sales is necessary before starting running campaigns, in case you won't just lose your money.


How can ACoS be calculated?

Here is the info you need to know in order to understand your costs per conversion clearly:

  • The price you're selling your items for;
  • Cost of items (cost per 1 unit paid to a supplier);
  • FBA fees;
  • Variable costs (shipping, packaging, and so on);

Note, that we won't discuss promos and discounts in this articles, so we don't take these cots into account.

Let's look at the example:

  • The price: $27
  • Cost of items: $4
  • Fees: $11
  • Variable costs: $3 (it includes the shipping cost)

​Let's calculate: 27-11-4-3 = 9. It appears that the final profit is $9 per one unit. Som we can spend those 9 dollars and be profitable. If you want to find out the ACoS threshold for the break-even level, divide the net income by the product's price. 9/27 = 0.33.

So, the ACoS threshold equals 33%. It means that we can earn money on any product keywords which cost of sale equals 33% or less.

Here is how it looks in the 'Keywords' tab:

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Create the first campaign

After we know how much money we can afford to spend and be profitable, it's time to create a PPC campaign. It's pretty simple and you can manage creating a campaign even before your coffee gets cold. However, I want to note some important steps you should pay attention to. I bet you won't be against saving money and knowing that your ads are effective.

There is an opportunity of creating 2 types of campaigns. One is a campaign with the automatic targeting and the other is manual. The first campaign let's Amazon to determine search queries for showing the ad. The last one lets me choosing the keywords by myself.

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Starting an automatic campaign

Click 'Create a campaign' and you'll see this:

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Starting a manual PPC campaign

Such campaigns give you an opportunity to upload keyword lists created on your own. I use Google Keyword planner, keywordtool.io and Ahrefs for that. Keep in mind that Keyword planner is a free feature accessible via an AdWords account.

Here are the keywords related to our example in Google Keyword planner:

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Import the keywords you need. After you've made a list of relevant keywords, upload it to Amazon in order to add them to your manual PPC campaign:

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Run your PPC and don't touch it!

Sit back and watch how your system works. Don't touch your campaigns until you run them for a week. After it passes, you can make adjustments to it.

Note that you may not see any sales, if you check the results in a few days after starting your PPC campaign. but it's okay. Amazon needs time for updating its reports. It usually takes them 48-72 hours to check your conversions.​​

 

Optimize Amazon PPC campaigns

After you've collected some data, let's look at how your campaign works and whether some adjustments are necessary.

Amazon PPC platform is very simple, as I mentioned before. It means that optimization options here are less that on Google, Bing and Facebook. Still, these are the main areas I focus on while optimizing my Amazon campaigns:

Filtering the keywords using their ACoS. You'll see what words convert sales and what ACoS they have.

Scan through all of them and remove the ones which ACoS is more than your threshold one (it was 33% for our example, if you remember). Find keywords that are below ACoS and increase the bid. Amazon will show your ads more often for that keyword.

Filter words by ​Order numbers. ​This metric will tell you which words drive the most conversions. Of course, you may look at in in the complex with others, but I personally look at this metric the most often.

Filter by Spend. Make sure that all the words you've invested in are effective. Keep in mind that paid search is aimed for bringing high-quality traffic to your brand at the most profitable cost. So, always check this parameter.

Bids. If some word is converting, but it is above your threshold ACoS, don't pause it. Adjust the bid for it according to your opportunities.

Broad match. This is a type of match that will show your ad the most relevantly. For example, if the bid is 'shoes', Amazon can show your ad for such queries as 'red shoe', 'sneakers', etc. Moreover, this is the only type of match offered by Amazon. If you need more accurate control, add Negative keywords.

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FAQ:

When should be paid campaigns turned on?
I usually turn them on after I get some reviews. Some people say that the ideal number is 10, as the more feedback you have, the more conversions you get. So, it makes sense to wait until some reviews appear, and then you can create Amazon PPC ads that will boost your organic ranking as well.

How much data is needed for making changes?
I would say that you should hit the level of statistical significance. Some assume that it's 100-200 conversions. I am not sure that we don't have so much time and money to wait for these results, so just wait for a week and make some conclusions what's working well for you.

How much keywords is better to include?
There are no right and wrong numbers. As for me, I upload nearly a hundred of words in my campaigns. You can always adjust this amount: add or remove some specific keywords, so keep an eye on the performance of your PPC campaigns.